Melbourne Market Wrap October 16th, 2016

A clearance rate of 79 per cent was recorded this weekend compared to 81 per cent last weekend and 73 per cent this weekend last year. There were 904 auctions reported to the REIV, with 717 selling and 187 being passed in, 82 of those on a vendor bid. The top auction suburbs in the year to date are South Kingsville, Briar Hill and Huntingdale – with a 92 per cent clearance rate in each.

Buyer demand is still keeping up with supply. More properties are coming onto the market for Spring however in much lower numbers compared to previous years. November the 26th is shaping up as huge day for auctions with many agents having filled most of their auction times already.

Sorry everyone for being off air for a few weeks, hope you’ve all survived without your weekly real estate news fix. I thought I’d recharge the batteries before the Spring rush and just as well I did. Despite my absence we managed a sale and purchase while away and last week have managed another two for our clients, so thank you to everyone!

Over the past week i also caught up with a friend who was telling me some interesting news about a fund manager’s annual meeting. Of course being a sticky beak I wanted to know what was said and what he gleaned about the Australian economy. What stood out in our conversation was the following, “Peter it’s not what they said but what they didn’t say that was most interesting.” Which got me thinking, yes there is a lot of “white noise” about the property market at the moment but what’s really happening that will affect the Melbourne market going forward? And what isn’t being said that’s really important for Mr and Mrs Smith?

1. Melbourne’s growing population. More than 100,000 people are pouring into Melbourne every year, the highest population growth in Australia.2.Money flowing into the eastern suburbs. Chinese money continues to be concentrated in Melbourne’s east. This is creating a disproportionate concentration of Asian buyers congregating in areas with high quality public schools and access to shopping centres and freeways such as the Eastern and South Eastern. An article reported by the Age over the weekend highlighted the effect of the Asian buyer. Where previously the darling suburbs for house price growth were East Melbourne and Williamstown North, this has changed to Box Hill, Balwyn Nth and Ashwood.3.The great divide is occurring. Median house prices in outer Melbourne suburbs are not keeping up with those within 20km’s of the CBD. Many lower income earners are being forced into outer suburbs with poor infrastructure and access to employment and the CBD. 4. Melbourne’s lack of investment in infrastructure. As Melbourne’s population increases more pressure is being placed on our roadways and public transport system which is bursting at the seams. Lack of funding from the Federal Government for Victoria is making travelling times unbearable for commuters.

All the above factors spell disaster for those home owners hoping to downsize from outer to inner suburban areas with good infrastructure, access to hospitals and health care, transport and employment opportunities. At the end of the day the value of your home when sold will determine the type of care and independence you will have.

Expert Says No Housing Crash

It’s nice to hear a different tune on the property market for a change, as reported in Investor Daily

AMP Chief economist saying “the surge in prices and debt has led many to conclude a crash is imminent, but we have heard that lots of times over the last 10-15 years. Several considerations suggest a crash is unlikely,”

According to Mr Oliver house prices in Melbourne and Sydney have risen by 60 and 40 per cent in the past four years with Sydney’s median house prices now 12.3 times household income.

Mr Oliver explained that debt interest payments relative to income are around 2004 levels, and lending standards in Australia have not dropped to levels seen in other countries.

Mr Oliver expects a rate cut to be on the cards in November with a final cut to 1% in 2018.

Street Advocate Client Reviews

Peter,

Just a short note to thank you once again for your help in selling the property.

Dealing with you Peter was a pleasant experience, you were very professional with all aspects of the sale including:

· Your knowledge of the real estate industry

· Negotiating down the agents fee.

· You understanding what marketing campaign was needed and directed the agent accordingly

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.